Categories
Profession

Big Four dominate professional services globally

The Managing Partners’ Forum was established in 1995 and is “dedicated to enhancing leadership and the status of the management team in professional firms worldwide.” They recently released the inaugural Global 500, a ranking of the top 500 professional services firms in the world by fee volume.

The Big Four are at the top of the list, with PricewaterhouseCoopers coming first, followed by Deloitte, Ernst & Young, and KPMG. Interestingly, Accenture, formerly Andersen Consulting, formerly a division of Arthur Andersen, formerly the auditor of Enron, formerly in existence, occupies the number five spot:

  1. PwC – $22.0B
  2. Deloitte – $20.0B
  3. Ernst & Young – $18.4B
  4. KPMG – $16.9B
  5. Accenture – $16.7B

I threw the numbers into Excel to do a little analysis. First, I wanted to see how they stacked up in terms of revenue per employee, since the report provided the number of employees. The third ranked firm in total revenue, Ernst & Young, is #1 when it comes to revenue per employee at approximately $161,000. The average of the Big Four is $154,000. The remainder of the four are in the same order as revenues, with PwC and Deloitte shuffling down to make way for E&Y:

  1. Ernst & Young – $161,000
  2. PwC – $154,000
  3. Deloitte – $151,000
  4. KPMG – $150,000

Beyond the Big Four, the next largest accounting firm is BDO at 22nd overall. Rounding out the top 10 accounting firms are Grant Thornton (35th), RSM (36th), Baker Tilly (46th), Horwath (48th) and Moores Rowland (50th). The average revenue per employee for those five firms is $114,230, which is significantly lower than BDO, in the middle of everyone, at $140,500.

The bottom of the Big Four in terms of total revenue is KPMG, but it is 332 per cent higher than BDO. There is about 10 per cent separating each of the Big Four, with PwC 10% larger than Deloitte, which is 9% larger than Ernst & Young, which is 9% larger than KPMG. BDO is about 40% larger than Grant Thornton and RSM. So the Big Four more spread out between each other than I’d originally thought, but is leagues above the rest of the pack which comes as no surprise at all.

It’s an interesting list, by an interesting ‘Forum’. Management in professional firms is a different beast altogether from management of more traditional “operations”. Experienced employees are an intangible asset of any type of business, but in professional services firms there are unique challenges which require special people skills. A good managing partner is so important to retaining strong team members and keeping them (us) satisfied.

(Via Accountancy Matters.)

Categories
Marketing

Firm using Facebook to recruit in Toronto

I’ve grown a bit tired of Facebook lately. I think it’s because what originally was a torrent of friend additions has gradually slowed to a trickle. (I meet lots of new people through my job but I doubt they want the auditor on their Facebook!)

It seems I’m not the only one who is questioning the system, but for other reasons. The lack of openness is leading some to compare it to AOL.

But despite our misgivings, the beast continues to grow. My city, Toronto, is apparently the “capital of Facebook”:

As a city, we have more members than New York, Los Angeles and San Francisco combined. Thirteen per cent of Torontonians have signed up. We not only have more members than any other city – 670,038 as of this week – we have more groups within the site talking about the goings on of our town.

What does this mean? The value of Facebook to its members increases exponentially as more people join, and for Torontonians, the value of a Facebook account is much higher than it would be for someone from, say, Saskatoon (29,475 members).

I wrote about Facebook before and compared it to LinkedIn. In the post I linked to some accounting-specific Facebook groups, including one I’ll mention again today: Ernst & Young Toronto.

I searched Facebook for groups for Toronto accountants, and the search turned up nothing very good other than the above group. Why are no more accounting firms in Toronto taking advantage of the massive percentage of the population using the site?

Recruiters are taking advantage of the clustering of Toronto accountants, as this screen grab from the Chartered Accountants of Canada group shows.

How long before firms in Toronto realize the recruiting potential of Facebook, as Ernst & Young has?

Categories
Accounting

Accounting news roundup

Categories
Taxation

Movie stars and the IRS, Ban Ki Moon, and the Top 100 Places to Work

Categories
Accounting

Quit today, get hired back tomorrow

A recent story by the AP highlighted an interesting byproduct of the CA shortage – employees who leave their job at accounting firms are being actively recruited back to rejoin their former firm. Seems employers have realized that more often than not in the accounting business employees leave to explore different career options but leave the door open to returning to public practice.

Audit senior manager Danica Dilligard left Ernst & Young LLP in 2003 after six years with the company. E&Y’s courtship began almost immediately. The E&Y partners she’d worked with called, saying, “Just wanted to make sure you’re happy. There’s always a home for you here.” She was invited to E&Y golf outings, where she played in a foursome with the partners. She was included in professional certification courses and welcomed at networking events.

Granted this is a senior manager we’re talking about, but I have seen it trickling down to just about every level, down to the lowliest junior. It’s smart though.